The Role of an Imitating Firm in a Dynamic Context
AbstractWe analyze the effects of an imitating firm on the behavior of the innovating firm. The framework of analysis used is a dynamic duopoly model of vertical product differentiation, where both the innovator and the imitator compete simultaneously in price and quality. We obtain that when the market is small, the presence of an imitator encourages the innovator to increase its innovating process, so the entry of the imitator should not be obstructed; and, when the market is large, the imitator reduces the innovator’s incentives to invest its economic resources in R&D and to provide a higher quality, so the entry of the imitator should not be encouraged.
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Bibliographic InfoArticle provided by Universidad de Antioquia, Departamento de Economía in its journal LECTURAS DE ECONOMÍA.
Volume (Year): (2007)
Issue (Month): 67 (Julio-Diciembre)
Postal: Lecturas de Economía, Departamento de Economía, Calle 67, 53-108, Medellin 050010, Colombia.
Other versions of this item:
- Francisco Martínez-Sánchez, 2007. "The Role of an Imitating Firm in a Dynamic Context," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE.
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bonanno, Giacomo & Haworth, Barry, 1998. "Intensity of competition and the choice between product and process innovation," International Journal of Industrial Organization, Elsevier, vol. 16(4), pages 495-510, July.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
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"Incentives to innovate in oligopolies,"
CORE Discussion Papers
2006014, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Paul, BELLEFLAMME & Cecilia, VERGARI, 2006. "Incentives to innovate in oligopolies," Discussion Papers (ECON - DÃ©partement des Sciences Economiques) 2006008, Université catholique de Louvain, Département des Sciences Economiques.
- Uri Ronnen, 1991. "Minimum Quality Standards, Fixed Costs, and Competition," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 490-504, Winter.
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